BPI and FGU Insurance Corp v. Laingo, G.R. No.

205206, 16 March 2016 (liability; agency)

Facts:

July 1999 Rheozel Liagao, son of Yolanda Liagao opened a Platinum 2-in 1 Savings and Insurance with
petitioner BPI. The said account is a savings account were dipositors are automatically covered by an
insurance policy against disability or death issued by petitioner FGU. BI passbook and Insurance
Coverage certificate is issued in favor of Rheozel, and Yolanda as beneficiary.

September 25, 2000, Rheosel died due to vehicular accident, since they are affluent the said incident
was headlined in Daily Mirror the next day.

Yolanda instructed their family secretary to go to BPI and inquire about Rhoezel’s account. Eventually,
she was able to withdraw Php 995,000 from Rhoezel’s account to be used for his funeral.

More than 2 years after, Rhoezel sister was cleaning his personal things when she found the Personal
Insurance Policy. She immediately informed Yolanda about it. Yolanda found out that she is the
beneficiary, hence she sent two letters to BPI and FGU requesting them to process her claim. FGU
replied denying her claim, and that she should filed her claim within 3 calendar months from her son’s
death as required under Parag 15 of the Insurance certificate:

15. Written notice of claim shall be given to and filed at FGU Insurance Corporation within three
calendar months of death or disability.

Yolanda filed a complaint for Specific Performance with damages and Attorneys fees before RTC Davao
against BPI and FGU. RTC ruled in favor of BPI and FGU. Yolanda appealed, CA revised the decision. The
Court of Appeals ruled that Laingo could not be expected to do an obligation which she did not know
existed. The appellate court added that Laingo was not a party to the insurance contract entered into
between Rheozel and petitioners. Thus, she could not be bound by the 90-day stipulation.

Issue:

WON Yolanda, the beneficiary who had no knowledge of the existence of the insurance contract is
bound to the three calendar month deadline for filing a written notice of claim upon the death of the
insured. No.

Ruling:

Petition dismissed for lack of merit.

In the present case, the source of controversy stems from the alleged non-compliance with the written
notice of insurance claim to FGU Insurance within three calendar months from the death of the insured
as specified in the insurance contract. Laingo contends that as the named beneficiary entitled to the
benefits of the insurance claim she had no knowledge that Rheozel was covered by an insurance policy
against disability or death issued by FGU Insurance that was attached to Rheozel's savings account with
BPI. Laingo argues that she dealt with BPI after her son's death, when she was allowed to withdraw
funds from his savings account in the amount of P995,000. However, BPI did not notify her of the
attached insurance policy. Thus, Laingo attributes responsibility to BPI and FGU Insurance for her failure
to file the notice of insurance claim within three months from her son's death. The court agrees with
this.

As the main proponent of the 2-in-1 deposit account, BPI tied up with its affiliate, FGU Insurance, as
its partner. Any customer interested to open a deposit account under this 2-in-1 product, after
submitting all the required documents to BPI and obtaining BPI's approval, will automatically be given
insurance coverage.

Thus, BPI acted as agent of FGU Insurance with respect to the insurance feature of its own marketed
product. Under the law, an agent is one who binds himself to render some service or to do something
in representation of another.

In Doles v. Angeles, we held that the basis of an agency is representation. The question of whether an
agency has been created is ordinarily a question which may be established in the same way as any other
fact, either by direct or circumstantial evidence. The question is ultimately one of intention . Agency may
even be implied from the words and conduct of the parties and the circumstances of the particular
case. For an agency to arise, it is not necessary that the principal personally encounter the third
person with whom the agent interacts. The law in fact contemplates impersonal dealings where the
principal need not personally know or meet the third person with whom the agent transacts: precisely,
the purpose of agency is to extend the personality of the principal through the facility of the agent.

In this case, since the Platinum 2-in-1 Savings and Insurance account was BPI's commercial product,
offering the insurance coverage for free for every deposit account opened, Rheozel directly
communicated with BPI, the agent of FGU Insurance. BPI not only facilitated the processing of the
deposit account and the collection of necessary documents but also the necessary endorsement for
the prompt approval of the insurance coverage without any other action on Rheozel's part. Rheozel
did not interact with FGU Insurance directly and every transaction was coursed through BPI.

BPI, as agent of FGU Insurance, had the primary responsibility to ensure that the 2-in-1 account be
reasonably carried out with full disclosure to the parties concerned, particularly the beneficiaries.
Thus, it was incumbent upon BPI to give proper notice of the existence of the insurance coverage and
the stipulation in the insurance contract for filing a claim to Laingo, as Rheozel's beneficiary, upon the
latter's death.

Malayan Insurance Co v. PAP Co (Phil Branch), GR No. 200784, 7 Aug 2013 – JOAN

PAP Co. insured their building against fire for the machineries and machineries located inside the Sanyo
Building. The coverage of the same is for Php 15,000,000.00 and effective for 1 year and it was procured
for RCBC the mortgagee of the insured machineries and equipment. Before the expiration, they
renewed the said insurance on an “as is” basis. A new policy was issued May 13 1997 to May 13, 1998.

During the subsistence of the new policy, the insured machineries and equipment were totally lost by
fire. Hence, PAP CO. filed a fire insurance claim with Malayan in the amount insured.

Malayan denied the claim on the ground at the time of the loss, the insured machineries and equipment
were transferred by PAP Co. to a location different from that indicated in the policy. Specifically, that the
insured machineries were transferred in September 1996 from the Sanyo Building to the Pace Pacific
Bldg., Lot 14, Block 14, Phase III, PEZA, Rosario, Cavite (Pace Pacific). Contesting the denial, PAP Co.
argued that Malayan cannot avoid liability as it was informed of the transfer by RCBC, the party duty-
bound to relay such information. However, Malayan reiterated its denial of PAP Co.’s claim. Distraught,
PAP Co. filed the complaint below against Malayan.

RTC ruled in favor of PAP Co. The RTC explained that Malayan is liable to indemnify PAP for the loss
under the subject fire insurance policy because, although there was a change in the condition of the
thing insured as a result of the transfer of the subject machineries to another location, said insurance
company failed to show proof that such transfer resulted in the increase of the risk insured against. In
the absence of proof that the alteration of the thing insured increased the risk, the contract of fire
insurance is not affected per Article 169 of the Insurance Code.

CA affirmed the decision with modification. Deleting the award for attorneys fees.

Issue:

WON Malayan is liable to PAP Co despite the transfer of the machines and equipment from one building
to another. No.

Ruling:.

CA’s decision if reversed. Malayan is not liable to the loss of machineries and equipment due to fire.

The Court agrees with the position of Malayan that it cannot be held liable for the loss of the insured
properties under the fire insurance policy.

the Pace Factory which totally burned the insured properties.

The policy forbade the removal of the insured properties unless sanctioned by Malayan

Condition No. 9(c) of the renewal policy provides:

9. Under any of the following circumstances the insurance ceases to attach as regards the property
affected unless the insured, before the occurrence of any loss or damage, obtains the sanction of the
company signified by endorsement upon the policy, by or on behalf of the Company:

x x x           x x x          x x x

(c) If property insured be removed to any building or place other than in that which is herein stated to
be insured.12

Evidently, by the clear and express condition in the renewal policy, the removal of the insured property
to any building or place required the consent of Malayan. Any transfer effected by the insured, without
the insurer’s consent, would free the latter from any liability.

The respondent failed to notify, and to obtain the consent of, Malayan regarding the removal.
The respondent failed to notify, and to obtain the consent of, Malayan regarding the removal

The records are bereft of any convincing and concrete evidence that Malayan was notified of the
transfer of the insured properties from the Sanyo factory to the Pace factory. The Court has combed the
records and found nothing that would show that Malayan was duly notified of the transfer of the
insured properties.

Granting that any notice to RCBC was binding on Malayan, PAP’s claim that it notified RCBC and Malayan
was not indubitably established. At best, PAP could only come up with the hearsay testimony of its
principal witness, Branch Manager Katsumi Yoneda (Mr. Yoneda)

Considering that the original policy was renewed on an "as is basis," it follows that the renewal policy
carried with it the same stipulations and limitations. The terms and conditions in the renewal policy
provided, among others, that the location of the risk insured against is at the Sanyo factory in PEZA. The
subject insured properties, however, were totally burned at the Pace Factory. Although it was also
located in PEZA, Pace Factory was not the location stipulated in the renewal policy. There being an
unconsented removal, the transfer was at PAP’s own risk. Consequently, it must suffer the
consequences of the fire. Thus, the Court agrees with the report of Cunningham Toplis Philippines, Inc.,
an international loss adjuster which investigated the fire incident at the Pace Factory, which opined that
"[g]iven that the location of risk covered under the policy is not the location affected, the policy will,
therefore, not respond to this loss/claim.

Accordingly, an insurer can exercise its right to rescind an insurance contract when the following
conditions are present, to wit:

1) the policy limits the use or condition of the thing insured;

2) there is an alteration in said use or condition;

3) the alteration is without the consent of the insurer;

4) the alteration is made by means within the insured’s control; and

5) the alteration increases the risk of loss.

Malayan Insurance Co v. Philippine First Insurance Co. GR No. 184300, 11 July 2012 – JOAN

Facts:

Wyeth Philippines, Inc. (Wyeth) and respondent Reputable Forwarder Services, Inc.
(Reputable) had been annually executing a contract of carriage, whereby the latter
undertook to transport and deliver the former's products to its customers, dealers or...
salesmen
Wyeth procured Marine Policy No. MAR 13797 (Marine Policy) from respondent Philippines
First Insurance Co., Inc. (Philippines First) to secure its interest over its own products.
Philippines First thereby insured Wyeth's nutritional, pharmaceutical and... other products
usual or incidental to the insured's business while the same were being transported or
shipped in the Philippines. The policy covers all risks of direct physical loss or damage from
any external cause, if by land, and provides a limit of P6,000,000.00 per any one... land
vehicle.
Wyeth executed its annual contract of carriage with Reputable. It turned out, however, that
the contract was not signed by Wyeth's representative/s
Under the contract, Reputable undertook to answer for "all risks with respect to the goods
and shall be liable to the COMPANY (Wyeth), for the loss, destruction, or damage of the
goods/products due to any and all causes whatsoever, including theft, robbery, flood,
storm,... earthquakes, lightning, and other force majeure while the goods/products are in
transit and until actual delivery to the customers, salesmen, and dealers of the COMPANY
The contract also required Reputable to secure an insurance policy on
Wyeth's goods
Reputable signed a Special Risk Insurance Policy (SR Policy) with petitioner Malayan for
the amount of P1,000,000.00.
during the effectivity of the Marine Policy and SR Policy, Reputable received from Wyeth
1,000 boxes of Promil infant formula worth P2,357,582.70 to be delivered by Reputable to
Mercury Drug Corporation in Libis, Quezon City. Unfortunately, on the same date,... the
truck carrying Wyeth's products was hijacked by about 10 armed men. They threatened to
kill the truck driver and two of his helpers should they refuse to turn over the truck and its
contents to the said highway robbers. The hijacked truck was recovered two weeks later...
without its cargo.
Philippines First, after due investigation and adjustment, and pursuant to the Marine Policy,
paid Wyeth
Philippines First then demanded reimbursement from Reputable, having been subrogated
to the rights of Wyeth by virtue of the... payment. The latter, however, ignored the demand.
Philippines First instituted an action for sum of money against Reputable
Philippines First stated that Reputable... is a... common carrier."
Reputable claimed that it is a private carrier. It also claimed that it cannot be made liable
under the contract of carriage with Wyeth since the contract was not signed by Wyeth's
representative and that the cause of the loss was force... majeure, i.e., the hijacking
incident.
Reputable impleaded Malayan as third-party defendant in an effort to collect the amount
covered in the SR Policy.
and that the SR Policy covered the risk of robbery or hijacking
Disclaiming any liability, Malayan argued, among others, that under Section 5 of the SR
Policy, the insurance does not cover any loss or damage to property which at the time of the
happening of such loss or damage is insured by any marine policy and that the SR Policy
expressly... excluded third-party liability.
the RTC rendered its Decision[11] finding Reputable liable to Philippines First for the
amount of indemnity it paid to Wyeth
Malayan was found by the RTC to be liable to Reputable to the extent of the policy
coverage... the CA rendered the assailed decision sustaining the ruling of the RTC,
Issue:
WON Reputable and/or Malayan is liable to Philippine First. Yes.
WON there is double insurance. No.
Ruling:
The Court finds no reversible error in the judgment sought to be reviewed.

1. Yes. Suffice it to say that Malayan's and Reputable's respective liabilities arose from different obligations-
Malayan's is based on the SR Policy while Reputable's is based on the contract of carriage.
2. Section 5 is actually the other insurance clause (also called "additional insurance" and "double
insurance"), one akin to Condition No. 3 in issue in Geagonia v. CA, 35 which validity was upheld by the
Court as a warranty that no other insurance exists. The Court ruled that Condition No. 3 36 is a condition
which is not proscribed by law as its incorporation in the policy is allowed by Section 75 of the Insurance
Code. It was also the Court s finding that unlike the other insurance clauses, Condition No. 3 does not
absolutely declare void any violation thereof but expressly provides that the condition "shall not apply
when the total insurance or insurances in force at the time of the loss or damage is not more than
P200,000.00."

In this case, similar to Condition No. 3 in Geagonia, Section 5 does not provide for the nullity of the SR
Policy but simply limits the liability of Malayan only up to the excess of the amount that was not covered
by the other insurance policy. In interpreting the "other insurance clause" in Geagonia, the Court ruled
that the prohibition applies only in case of double insurance. The Court ruled that in order to constitute a
violation of the clause, the other insurance must be upon same subject matter, the same interest therein,
and the same risk. Thus, even though the multiple insurance policies involved were all issued in the name
of the same assured, over the same subject matter and covering the same risk, it was ruled that there was
no violation of the "other insurance clause" since there was no double insurance.

Section 12 of the SR Policy, on the other hand, is the over insurance clause. More particularly, it covers the
situation where there is over insurance due to double insurance. In such case, Section 15 provides that Malayan
shall "not be liable to pay or contribute more than its ratable proportion of such loss or damage." This is in accord
with the principle of contribution provided under Section 94(e) of the Insurance Code, 37 which states that "where
the insured is over insured by double insurance, each insurer is bound, as between himself and the other insurers,
to contribute ratably to the loss in proportion to the amount for which he is liable under his contract."

Clearly, both Sections 5 and 12 presuppose the existence of a double insurance. The pivotal question that now
arises is whether there is double insurance in this case such that either Section 5 or Section 12 of the SR Policy may
be applied.

By the express provision of Section 93 of the Insurance Code, double insurance exists where the same
person is insured by several insurers separately in respect to the same subject and interest. The requisites
in order for double insurance to arise are as follows:
1. The person insured is the same;

2. Two or more insurers insuring separately;

3. There is identity of subject matter;

4. There is identity of interest insured; and

5. There is identity of the risk or peril insured against.

chanrobles virtual law library

In the present case, while it is true that the Marine Policy and the SR Policy were both issued over the same subject
matter, i.e. goods belonging to Wyeth, and both covered the same peril insured against, it is, however, beyond
cavil that the said policies were issued to two different persons or entities. It is undisputed that Wyeth is the
recognized insured of Philippines First under its Marine Policy, while Reputable is the recognized insured of
Malayan under the SR Policy. The fact that Reputable procured Malayan s SR Policy over the goods of Wyeth
pursuant merely to the stipulated requirement under its contract of carriage with the latter does not make
Reputable a mere agent of Wyeth in obtaining the said SR Policy.

The interest of Wyeth over the property subject matter of both insurance contracts is also different and distinct
from that of Reputable s. The policy issued by Philippines First was in consideration of the legal and/or equitable
interest of Wyeth over its own goods. On the other hand, what was issued by Malayan to Reputable was over the
latter s insurable interest over the safety of the goods, which may become the basis of the latter s liability in case
of loss or damage to the property and falls within the contemplation of Section 15 of the Insurance Code. 39ςrνll

Therefore, even though the two concerned insurance policies were issued over the same goods and cover the
same risk, there arises no double insurance since they were issued to two different persons/entities having distinct
insurable interests. Necessarily, over insurance by double insurance cannot likewise exist. Hence, as correctly ruled
by the RTC and CA, neither Section 5 nor Section 12 of the SR Policy can be applied.

Country Bankers Insurance Corporation v. Lagman, GR No. 165487, 13 July 2011 – JOAN